New Delhi’s Tehran conundrum

26 February 2012

As the international screws tighten on Iran, the Indian government is being forced to engage in a high-pressure balancing act.

Illustration: Paul Aitchison

The battle between Iran and Israel has now landed on Indian shores. New Delhi, which so likes to sit on the fence, may now be forced to take a strong stand one way or another. On 13 February, just as an explosive device placed under an Israeli embassy vehicle in Tbilisi was being defused, a ‘sticky bomb’ attached to a vehicle carrying an employee of the Israeli embassy in New Delhi exploded. The attacks happened almost simultaneously and were clearly targeting employees of Israeli diplomatic missions. A day later, an Iranian man carrying grenades blew off his own legs and wounded four civilians after an earlier blast shook his house in Bangkok. In response, Israel has increased its domestic state of alert, emphasising security in public places, foreign embassies and offices, and at Ben-Gurion International Airport.

Though no one has claimed responsibility for the incidents, the Israeli government has made it clear that it believes Iran and its proxy, Hezbollah, to be behind the attacks. Tel Aviv has used these attacks to underline its concerns about Iran gaining nuclear capability, arguing that if the Islamic republic becomes a nuclear power it could provide greater protection for militant groups emboldened by its support. Iran, of course, has denied responsibility for the bombings, and the Iranian Foreign Ministry has alleged that ‘these suspicious incidents are designed by the Zionist regime and carried out with the aim of harming Iran’s reputation.’

A covert war is raging with Iran on one side and the West, the Arab Gulf states and Israel on the other. Several Iranian nuclear scientists have been assassinated, while the Stuxnet computer worm has been employed to target industrial software critical to Iran’s uranium-enrichment efforts. Recently, arrests in Azerbaijan and Thailand have purportedly disrupted extremist plots aimed at Israeli diplomatic targets, and diffused an apparent threat to Israeli interests in Bulgaria.

Much like its predecessor, the administration of President Barack Obama has vowed that it would not allow Iran to engage in the building of nuclear weapons. Israel is already fretting over its pre-emptive options. Tel Aviv has made it clear, time and again, that it would not hesitate to act unilaterally and overrule American objections if it judges that Iran is getting too close to nuclear weapons capability. Meanwhile, tensions are rising in the capitals of the Arab Gulf states. It was Saudi Arabia’s King Abdullah, after all, who famously advised American diplomats that the only Iran strategy that would work was one that ‘cut off the head of the snake’.

Since last year, the Islamic republic has seen its most significant regional rival, the government of former Egyptian President Hosni Mubarak, toppled by protesters, while Hezbollah has strengthened its grip on Lebanon. Saudi Arabia, another regional bulwark against Iranian expansion, is currently distracted by uprisings on its own borders, particularly in Yemen, Oman and Bahrain. Sensing an opening, Iran has ratcheted up its competition with Saudi Arabia for influence in the region. The Iranian plot to kill the Saudi ambassador to the United States, Adel al-Jubeir, disclosed last year, is just one of the recent manifestations of this long-standing conflict. Iran’s hand was also suspected in the death of Hassan M al-Kahtani, a Saudi diplomat, in Pakistan last year, and the role of the Quds Force, Iran’s elite military unit, has come under scanner for that incident.

Q & A with Harsh Pant

Does India have a stated position on the possibility of a preemptive strike against Iranian nuclear facilities?

India’s stated position is one of strong opposition to the use of military force against Iran. New Delhi has repeatedly stated that dialogue is the answer and a diplomatic solution must be sought in dealing with the Iranian nuclear issue.

Regardless of any previously stated position, how you would foresee New Delhi reacting in the event of such a strike and/or prolonged war, including potentially with the participation of Western powers?

In the event of a strike or a prolonged war, it is difficult to see what credible options India may have apart from making its opposition clear at various diplomatic forums. The difficulty for India would be greater if the military action would happen with support from the Arab Gulf states. Given India’s high-stakes involvement in the Arab world, New Delhi would not want to antagonize the Arab states too much.

What impact would such a scenario have on Indian/ Southasian oil supply and, more broadly, on the region’s economies?

Conflict in the Middle East will have a huge impact on the world economy and South Asian energy dynamic. The world economy has just started limping back to some sort of normalcy. Any disruption in energy supplies from the Middle East has the potential to damage the global economy seriously. India and other South Asian states rely on the region much more than the developed world, so the impact on South Asia would be much greater. The costs of conflict are so high that perhaps it is the only credible deterrent against an all out war in the region.

Supporting non-proliferation

From New Delhi’s perspective, this is a very disturbing and dangerous escalation, as it puts Indian diplomacy in a difficult situation. As tensions rise between the West and Iran, the international community is looking anxiously to the emerging powers of China and India to provide some help in restoring the delicate balance of power in West Asia. China’s response has been to steadfastly reject Western overtures to impose sanctions on Iran, even as Beijing has signed a cooperation pact for civilian nuclear energy with Saudi Arabia. This is standard Chinese diplomatic practice in the region: trying to be all things to all parties, even when the parties concerned – Saudi Arabia and Iran – stand on starkly opposite sides of the nuclear divide.

India’s response so far has been low key, but New Delhi too is readying itself. S Jaipal Reddy, India’s oil minister, has suggested that India should be prepared for all eventualities and is planning to replace part of its Iranian oil supplies through other sources, such as Saudi Arabia. India currently imports 12 percent of its oil from Iran, its second-largest supplier after Saudi Arabia. Finance Minister Pranab Mukherjee was merely reflecting on this intersection between domestic and foreign policy when he suggested, in late January, that it was not ‘possible for India to take any decision to reduce the imports from Iran drastically’ in light of India’s growing budget deficit and the government’s need to continue oil subsidies so as to placate citizens during a critical state-election year.

India also remains firm in opposing American and European Union unilateral sanctions on Iran, especially as concerns rise that the US might persuade Turkey to block India’s use of its banks as intermediaries to pay Iran for the USD 12 billion worth of annual crude-oil exports. India is now working with Iran to find the best way to ensure uninterrupted purchase of oil at a time when the US is ready to impose sanctions against firms that do business with Iran’s Central Bank. The US has also been increasingly reaching out to its Asian partners, such as Japan and South Korea, in order to isolate Iran.

India’s official position on the Iranian nuclear question has been relatively straightforward. Although New Delhi believes that Tehran has the right to pursue civilian nuclear energy, the Indians have maintained that Iran needs to clarify the doubts raised by the International Atomic Energy Agency (IAEA) regarding Iran’s compliance with the Non-Proliferation Treaty. India has long maintained that it does not see further international nuclear proliferation as being in its interests. This position has as much to do with India’s desire to project itself as a responsible nuclear state as with the very real danger that further proliferation in its extended neighbourhood could endanger its own security. India has continued to affirm its commitment to enforce all sanctions against Iran as mandated by the UN Security Council since 2006, when the first set of sanctions was imposed. However, much like Beijing and Moscow, New Delhi has argued that such sanctions should not hurt the Iranian populace and has expressed its disapproval of sanctions by individual countries that restrict investments by third countries in Iran’s energy sector.

India shares with the West the belief that Iranian nuclear ambitions would destabilise West Asia. Prime Minister Manmohan Singh is on record suggesting that a nuclear Iran is not in India’s national interest. But New Delhi does not have the luxury of viewing Iranian nuclear ambitions solely through the prism of Iran-Israel rivalry, as is the norm in the West. India has to consider this issue from a much wider perspective, in which Iran’s nuclear drive fuels Arab-Iranian, and especially Sunni-Shia, rivalry. For Tehran, its nuclear ambitions are as much a counter to a two-front encirclement of its own Shia population by Sunni Pakistan and Sunni Saudi Arabia as they are an attempt to end Israel’s nuclear monopoly in the region.

The Riyadh Declaration, signed in January 2010 during Prime Minister Singh’s visit to Saudi Arabia, requested that Iran ‘remove regional and international doubts about its nuclear weapons program’. In fact, India has even endorsed the Arab call for a nuclear-weapons free West Asia, a proposal traditionally targeting Israel but now increasingly focused on Iran.

Oil and ‘Af-Pak’

Still, India has its own energy interests, and would like to increase its presence in the Iranian energy sector. Given its rapidly rising energy needs, New Delhi is rightfully feeling restless about its own marginalisation in Iran. Not only has Pakistan signed a pipeline deal with Tehran, but China is also starting to make its presence felt. China is now Iran’s largest trading partner and is undertaking massive investments in the country, rapidly occupying the space vacated by Western firms. Western sanctions over the years have led to the entrenchment of Chinese companies in the Iranian oil-and-gas sector, with a range of contracts worth up to USD 40 billion signed in the past few years alone. With China’s growing thirst for oil (it is the world’s second-largest crude consumer) and Iran’s reserves of oil and natural gas ranking among the world’s largest, the two countries’ interests are naturally complementary. And in the absence of Western investment, it is the Chinese companies that bring much-needed foreign capital to Iran’s energy sector. China’s state-backed oil-trading companies are likely to be the main beneficiaries of the Western embargo on Iranian oil exports.

Where Beijing’s economic engagement with Iran is growing, India’s presence is shrinking, as firms such as Reliance Industries have withdrawn from Iran, partially under Western pressure. Others firms have shelved their investment plans. India has always dutifully enforced UN measures against Iran, often to the detriment of its energy investments in the country. Yet China, which as a member the UN Security Council helps shape UN policy toward Iran, has been able to sustain its own energy business in the country without much trouble.

Then there is Afghanistan, the crucial regional issue where India and Iran need each other. The US’s Afghanistan policy has caused consternation in Indian policymaking circles, with a fundamental disconnect emerging between US and Indian interests in both Afghanistan and Pakistan. Although actively discouraging India from assuming a higher profile in Afghanistan for fear of offending Pakistan, the United States has failed to persuade Pakistan to take seriously Indian concerns regarding India-targeted extremism emanating from Pakistani soil. So long as Afghan territory is not being used to launch attacks on US soil, Washington may have no vital interest in determining who actually governs Afghanistan. To India, however, this is an important issue. If Washington were to abandon the goals of establishing a functioning Afghan state and encouraging a moderate Pakistan, the pressure on Indian security would increase greatly. To preserve its interests in case such a strategic milieu evolves, India would have reason to coordinate more closely with states such as Russia and Iran.

In recent months, India has reached out to Iran about Afghanistan, and the two sides are now involved in ‘structured and regular consultations’ on the issue. Both New Delhi and Tehran are unlikely to accept a political regime in Kabul that serves as a springboard to project Pakistan’s military interests. But India will benefit from working with Tehran only if Iran is also genuinely interested in stabilising Afghanistan. If Tehran’s interests are primarily driven by its desire to see the US withdraw from Afghanistan, then New Delhi will be forced to rethink its approach. If the US decides to leave Afghanistan and allow Pakistan to retain its pre-2001 leverage, New Delhi and Tehran will be drawn closer together to counteract Islamabad’s influence in Kabul, which has been largely detrimental to their interests in the past. It is for Washington to understand the implications of its policies in the rapidly evolving strategic milieu surrounding ‘Af-Pak’ and allay the concerns of other regional actors so that a stable Afghanistan may emerge in the coming years.

Nonetheless, the larger strategic reality that confronts New Delhi in West Asia today is that India has far more significant interests to preserve in the Arab Gulf. As tensions rise between the Sunni Arab regimes and Iran, India’s large stake in the Arab world will continue to inhibit Indian-Iranian ties. At the same time, New Delhi’s outreach to Tehran will remain circumscribed by the internal power struggle within Iran, growing tensions between Iran and its Arab neighbours, and Iran’s continued defiance of the global nuclear order. But given India’s domestic politics and energy challenges, and the coming power void in Afghanistan, New Delhi will not be in a position to jettison Tehran completely in the immediate future.

~ Harsh V Pant is a Reader in International Relations at King’s College London in the Department of Defence Studies, and the author of, most recently, The China Syndrome: Grappling With an Uneasy Relationship.